Minor Loophole

WASHINGTON —  At age 10, Skye Stolnitz of Los Angeles contributed $1,000 to the 1996 presidential campaign of Republican Lamar Alexander. Her dad said the funds came from Skye’s personal checking account.

Asher Simon was 9 years old when he gave $1,000 each to Sen. Dianne Feinstein (D-Calif.) and two other Democrats in 1994. Asher’s mother said the boy “supports candidates he agrees with.”

Lindsey Tabak, then 15, donated $20,000 to the Democratic Party in 1996. Asked about the source of the money, Lindsey said: “I know it was in my name.”

These youngsters are part of a developing trend in the world of political money: contributors who donate generously even though they’re not old enough to drive a car or register to vote. On paper at least, children and high school and college students gave a total of $7.5 million in political donations from 1991 through 1998, according to a Times study of federal election records.

In many cases, as with Skye, Asher and Lindsey, the children’s donations came on the same day or about the same time that their parents gave the maximum contribution allowed under federal law.

Campaign finance experts say the practice of student giving has become one of the most blatant ways that affluent donors circumvent federal limits.

“This is an area of great abuse where you have the absurd situation of small children supposedly contributing their own money to a candidate of their own choice,” said Donald J. Simon, executive vice president of the watchdog group Common Cause. “Obviously, in many cases, what’s going on is simply a way for the parents to beat the contribution limits.”

Parents interviewed for this story insisted that the children contributed their own funds and were not part of any scheme to skirt federal limits. But the Federal Election Commission has regarded student giving as such a potentially serious loophole that it has urged Congress to ban donations by minors, based on the “presumption that contributors below age 16 are not making contributions on their own behalf,” according to the commission’s 1998 legislative recommendations.

Federal law places no minimum age on donors but requires that the funds be “owned or controlled exclusively” by contributors and that they give “knowingly and voluntarily.” Also, parents are specifically prohibited from giving money to their children to make political donations.

In each election, the law allows individual donors of any age to give $1,000 to a candidate and $20,000 to a political party in so-called hard money, which can only be used to advocate the election or defeat of specific candidates. There are no contribution limits on “soft money” donated to the parties for a broad range of political uses.

The analysis, conducted for The Times by the independent Campaign Study Group of Springfield, Va., shows that young contributors are giving increasingly large amounts to federal candidates and campaign committees. Since 1991, donors identified as “students” made 8,876 federal contributions of $200 or more and in 163 instances gave $5,000 or more.

Student donors gave nearly $2.6 million for the 1996 presidential elections--a 45% increase over 1992. Complete computerized data for the 1998 elections are not yet available.

The study understates the full extent of donations by minors because political committees often fail to report a contributor’s occupation as required by law and donors are not asked to provide their ages. The Times identified the ages of donors through public records and interviews.

Only One Parent Fined Since 1975

Youthful donors attract little scrutiny from the FEC, which is responsible for civil enforcement of U.S. election laws. The agency rarely investigates allegations arising from donations by minors: Since 1975, it has investigated and closed only four such cases, levying one $4,000 fine against a parent for donating money through a child.

Representatives for the Democratic and Republican parties said they do not solicit contributions from the children of donors.

Yet veteran campaign operatives, speaking on the condition of anonymity, said that major donors are often reminded that family members may also contribute. While professional fund-raisers are instructed to inform such donors of the legal requirements, other individuals soliciting contributions may “forget the niceties,” one longtime Democratic campaign advisor said. Campaign finance experts even have a name for the practice: “family bundles.”

The sponsors of the sweeping bipartisan campaign finance bill that passed the House last year included a provision that would have banned all donations to candidates and political parties from individuals under 18. The bill stalled in the Senate. The sponsors reintroduced the legislation last month with the same proposed ban on child donors.

The Times study found at least four donors age 10 or under who gave $1,000 or more. In two additional cases that were previously reported, donors were so politically precocious that they were still in diapers.

’ . . . On Behalf of My Daughter’

On Jan. 25, 1996--the same day her parents made identical donations--Skye Stolnitz, then 10, gave $1,000 to the Republican presidential primary campaign of former Tennessee Gov. Alexander.

“It was my decision based on what I thought was in her best interest,” said Skye’s father, Scott A. Stolnitz, a dentist in Marina del Rey. “I felt that Lamar Alexander at the time had the solutions for education in America, which I was very concerned about on behalf of my daughter.”

He said that the $1,000 came from Skye’s checking account, which he funds. Stolnitz said that he discussed the donation with his daughter, “even at that tender age. I told her what I was doing and why. She did not object.”

He said he was “not aware” of federal laws that require donors to make such decisions on their own and had no intention of exceeding contribution limits.

When young Asher Simon made $1,000 contributions to Feinstein, then-House Speaker Thomas S. Foley (D-Wash.) and then Rep. Lee H. Hamilton (D-Ind.) in 1994, both his parents also gave to the same candidates during the same election cycle, including the maximum to Feinstein and Foley. This was the only time that Asher, who is now 13, made a federal contribution, records show.

Herbert Simon, Asher’s father, is a leading developer of shopping malls and, along with his brother, owns the Indiana Pacers professional basketball team. Diane Meyer Simon, a former Democratic National Committee member, said that her son “comes from a very political family that has a long tradition of supporting candidates.”

The Simons, who own homes in Indianapolis and Santa Barbara, have donated nearly $1 million to candidates and party committees since 1991, records show.

Asher’s four older siblings gave an additional $40,750. Rachel and Sarah Simon contributed the same amounts to the same candidates as Asher when they were about 14 and 12, records show.

“Whatever payments were made were in trust accounts and accounted for properly,” said Robert F. Wagner, an attorney for Diane Meyer Simon. “This is a very, very decent family. . . . There was no intent to do anything improper.”

The FEC permits political donations from a trust fund but requires that the beneficiary make the donation “knowingly and voluntarily.” The key to the propriety of such a donation is how much control the beneficiary exercises over the trust fund, election law attorneys said.

High School Sisters Give $40,000 to Party

Lindsey Tabak was a high school sophomore and her sister, Lauren, a senior in Livingston, N.J., when each contributed $20,000 to the Democratic Congressional Campaign Committee on Oct. 29, 1996. Twelve days earlier, their parents, Mark H. Tabak and Judy Wais Tabak, each gave the maximum legal donation to the committee.

Lindsey said her contribution “was like a family decision that we would donate the money to the Democratic Party.”

Asked whose money it was, she replied: “It’s like the family’s. . . . I’m not sure where it came from. I know it was in my name.”

Mark Tabak, who manages a firm that invests in international health-care ventures, said that the money came from his daughters’ trust funds, a portion of which is earmarked for political and charitable contributions. He called it “a collective decision” to help the Democrats try to retain control of Congress.

“I assure you that this was not a scam to bypass hard-money limits,” Tabak said, noting that he and his wife could have given unlimited sums of soft money to the Democratic group. Political parties prefer hard-money donations because of the restrictions imposed on how they spend soft money.

Both major political parties have benefited from student donors. Since 1991, Democrats have raked in $4.3 million and Republicans received $2.7 million.

Many of the student contributors were old enough to attend college, according to public records and interviews. Some of these donors contributed to the same campaigns, in similar amounts and at the same times as their parents.

Contributions Often Match Parents’

Take the case of Steven P. St. Martin. The son of a wealthy Louisiana attorney, he gave a total of $35,000 to various Democratic campaigns between 1991 and 1998 when he was a college and law school student. His contributions often matched those of his father, Michael X. St. Martin, his mother or his brothers, records show.

“I make my contributions completely on my own,” said Steven St. Martin, now an attorney in Houma, La. He declined to explain the correlation between his donations and those of his family. “It’s kind of personal,” he said.

Two estranged daughters of Dallas billionaire Harold C. Simmons alleged that their father used trust funds to make political contributions in their names without their permission. This was part of a broader lawsuit claiming that Simmons squandered the trusts on various expenses.

The trust for one daughter, Andrea Simmons Harris, gave $36,500 to Republican candidates between 1991 and 1993 when she was a student in her mid-20s, records show. Simmons and other family members usually made the maximum legal donations to the same recipient on the same day.

Simmons, who denied wrongdoing, agreed last year to pay his adult daughters $50 million each to drop the suit seeking his removal as trustee of the family fortune.

At the other end of the “student” spectrum are the diaper donors.

Bradford Bainum was 18 months old when he made the first of four contributions to Democratic candidates in 1992 and 1993, records show. He gave $4,000 by the time he was 2.

His father, Stewart Bainum Jr., executive of a nursing home chain and former Maryland state senator, acknowledged donating in the name of his son as well as exceeding contribution limits in a 1997 settlement with the FEC. He paid a penalty of $4,000.

This is the only time since the current campaign finance system was established in 1975 that the FEC fined a donor in a case involving contributions by a minor.

The FEC may impose penalties up to the amount of a contribution for giving in the name of another person or twice the amount if the transgression is knowing and willful. The agency may also find that a parent exceeded the contribution limit by donating through a child.

“It’s not an easy area of the law to enforce,” said Ian Stirton, an FEC spokesman. “Somebody has to know this is going on.”

Still, the agency has acknowledged serious concerns over the practice of student giving.

Lois G. Lerner, the FEC’s associate general counsel, said that, while commission members have not yet addressed this issue, the agency “has realized in recent years that people are trying to get as much money into the process as they can and this is an area where it’s pretty easy to do so.”

Parent donors may also trip over state election laws.

Al Checchi, the multimillionaire former Northwest Airlines chairman who ran for governor of California last year, acknowledged in 1997 that he arranged two contributions in the names of his children without their knowledge.

Checchi’s business partner, who controlled the Checchi children’s trust accounts, sent $500 checks in the names of Adam and Kristin Checchi to the 1990 gubernatorial primary campaign of Democrat John K. Van de Kamp. That same day, Checchi and his wife each gave Van de Kamp $1,000, the legal limit under California law at the time.

Checchi said the children--ages 12 and 9 at the time--were unaware of the donations. He said he did not know that such donations would pose a problem; they were returned by the campaign.

Campaign finance experts said that some parent donors, who are unfamiliar with the intricacies of election laws, may unwittingly use their children as conduits.

Kenneth A. Gross, an election law attorney and former FEC enforcement chief, said that his advice for clients is simple: “I certainly discourage any giving by children.”

Times researchers Janet Lundblad in Los Angeles and Tricia Ford in Washington contributed to this story.

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The Book on Student Giving

Contribution between 1991 and 1998

Number of federal campaign contributions: 8,876*

Total amount contributed by students: $7.5 million

Number of students contributing a total of $5,000 or more: 163

* Includes only contributions of $200 or more

Source: Federal Election Commission records

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Deep Pockets, Short Pants

Each of these students gave the same maximum donations to federal candidates or political parties as their parents. Their parents or representatives defended the contributions, saying that the money was their children’s, that the youths contributed voluntarily and that the parents were not trying to evade federal limits by giving through their children.

Donor, Recipient and Parents: (Student) Skye Stolnitz (age 10*)

Amount: $1,000

Date: Jan. 25, 1996

Donor, Recipient and Parents: (Recipient) Lamar Alexander for President

Donor, Recipient and Parents: (Parents) Dr. Scott A. Stolnitz (father)

Amount: $1,000

Date: Jan. 25, 1996

Donor, Recipient and Parents: (Parents) Cindy B. Stolnitz (mother)

Amount: $1,000

Date: Jan. 25, 1996

Explanation: “It was my decision based on what I thought was in her best interest,” her father said.

****

Donor, Recipient and Parents: (Student) Asher Simon (age 9)

Amount: $1,000

Date: Sept. 12, 1994

Donor, Recipient and Parents: (Recipient) Sen. Dianne Feinstein (D-Calif.)

Donor, Recipient and Parents: (Parents) Herbert Simon (father)

Amount: $1,000

Date: May 12, 1994

Donor, Recipient and Parents: (Parents) Diane Meyer Simon (mother)

Amount: $1,000

Date: Oct. 21, 1993

Explanation: Asher “supports candidates he agrees with,” his mother said.

****

Donor, Recipient and Parents: (Student) Lindsey Tabak (age 15)

Amount: $20,000

Date: Oct. 29, 1996

Donor, Recipient and Parents: (Recipient) Democratic Congressional Campaign Committee

Donor, Recipient and Parents: (Parents) Mark H. Tabak (father)

Amount: $20,000

Date: Oct. 17, 1996

Donor, Recipient and Parents: (Parents) Judy Wais Tabak (mother)

Amount: $20,000

Date: Oct. 17, 1996

Explanation: The contribution “was like a family decision that we would donate money to the Democratic Party,” Lindsey said.

****

Donor, Recipient and Parents: (Student) Elizabeth Heyman (age 7)

Amount: $1,000

Date: Sept, 26, 1988

Donor, Recipient and Parents: (Recipient) Sen. Joseph I. Lieberman (D-Conn.)

Donor, Recipient and Parents: (Parents) Samuel J. Heyman (father)

Amount: $2,000**

Date: Dec. 12, 1987

Donor, Recipient and Parents: (Parents) Ronnie F. Heyman (mother)

Amount: $2,000**

Date: Dec. 15, 1987

Explanation: “The children were asked and they thought it was a great idea,” said Michael Kempner, a spokesman for the Heymans.

****

Donor, Recipient and Parents: (Student) Benjamin Lipman (age 9)

Amount: $1,000

Date: June 19, 1987

Donor, Recipient and Parents: (Recipient) Pierre S. “Pete” du Pont IV for President

Donor, Recipient and Parents: (Parents) Ira A. Lipman (father)

Amount: $1,000

Date: June 18, 1987

Donor, Recipient and Parents: (Parents) Barbara Lipman (mother)

Amount: $1,000

Date: June 18, 1987

Explanation: This was a way “to expose the children to political candidates and get [them] involved in the process,” Ira Lipman said.

* All ages given were at time of donation

** Total includes maximum contributions for both primary and general elections

Sources: Analysis of Federal Election Commission records by the Campaign Study Group, other public records and interviews

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Contribution Proposal by FEC

This is the Federal Election Commission’s 1998 recommendation for legislation to prohibit contributions by minors:

Recommendation: The commission recommends that Congress establish a presumption that contributors below age 16 are not making contributions on their own behalf.

Explanation: The commission has found that contributions are sometimes given by parents in their children’s names. Congress should address this potential abuse by establishing a minimum age for contributors, or otherwise provide guidelines ensuring that parents are not making contributions in the name of another.

Source: FEC Annual Report